4 Strategic Approaches to Achieving a Competitive Advantage

WHY DO YOU STAND OUT?

It’s not easy or natural to brag about yourself, but really…why are you better than the rest? What is your competitive advantage?

If you can answer that question you are miles ahead of your competition. Having a competitive advantage comes down to how well you are able to differentiate your company and team from competitors. Here are 4 Strategic Approaches to Achieving a Competitive Advantage:

1) Be the industry's low-cost provider.

Having a low-cost competitive advantage means that you are able to provide products or services at a lower cost than competitors in your industry. Examples include companies like Walmart, McDonalds, and Ikea. These companies aim to be the industry’s low-cost providers. They maintain their advantage by selling high volumes at lower profits per individual sale. It’s all about minimizing costs and passing them along to the customer. 

2) Outcompete rivals by differentiating features.

Having a feature-based competitive advantage means that you are able to provide products or services with better features and benefits than your competitors. “Better” could mean anything from higher quality or a wider selection, to being more aesthetically pleasing and user friendly or technologically superior overall. Examples include companies like Apple, Nike, Ferrari, and Prada. These companies aim to be industry leaders because of feature-based differentiation. They maintain their advantage by creating perceived brand value that positions them as a provider of high quality and prestigious products and services. The brand itself becomes highly valuable because it represents excellence.

3) Focus on a narrow market niche.

Having a niche-based competitive advantage over rivals means that you are able to achieve a competitive edge by doing a better job than competitors at serving the specialized needs and tastes of the customers in a particular niche. For example, Cricket Wireless’ key differentiation right now is that they are able to offer their customers a $30 per month flat charge. Though they may not offer as much coverage as companies like Verizon or AT&T, they are able to leverage the fact that there is a sizeable niche of customers who would trade that benefit for lower monthly bills.

4) Offer the lowest (best) prices for differentiated goods.

Having a best-cost competitive advantage over rivals means that you are able to achieve a competitive edge by providing customers with a product or service that is comparable or better to competitors and costs less. TJ Maxx, Ross, and Dillard’s are interesting examples of department stores that maintain this type of competitive advantage. They do this by offering designer brands that consumers want, at a lower price than they would pay with competitors.

YOUR SKILLS AND PERSONALITY ARE UNIQUE.

Though it’s not easy or natural to brag about yourself, it is necessary if you want to sell yourself.

Why do you stand out and what are you fantastic at? If you can figure that out, and you enjoy solving problems, the possibilities are endless. Stick to what you are good at and look for opportunities where you can leverage those core competencies to give you a competitive advantage over others.